Italy enjoyed an impressive run to the finals of Euro 2012 this summer, beating England and Germany before eventually falling to defending champions Spain.
Prandelli believes that the recognition afforded to his star players is a sign that Italian football is improving.
He told reporters: "It is great news for the whole of Italian football. It is recognition that gives us great optimism for the future.
"It is brilliant to have three candidates for the Ballon d'Or."
Balotelli is one of only five of Premier League players to make the shortlist, with Manchester City teammates Yaya Toure and Sergio Aguero featuring alongside Manchester United duo Wayne Rooney and Robin van Persie.